Support

A cookie is a piece of data stored by your browser or device that helps websites like this one recognize return visitors. We use cookies to give you the best experience on BNA.com. Some cookies are also necessary for the technical operation of our website. If you continue browsing, you agree to this site’s use of cookies.

Marketing Services

Bloomberg Next marketing services allow clients to elevate their brands and extend their reach through our established and trusted expertise, enhanced with engaging event production, appealing design, and compelling messaging.

Stay ahead of developments in federal and state health care
law, regulation and transactions with timely, expert news and analysis.

Medical device companies should make sure that they have robust compliance
programs as they face increasing governmental enforcement action and new
potential areas of liability, experts said at a conference March 4.

Discussing the liability landscape for device manufacturers in 2013 at the
Food and Drug Law Institute's Medical Device Compliance, Regulation and
Litigation conference in Washington, attorneys and device company officials said
the government is increasingly focusing enforcement efforts on device
companies.

“In the last ten years, the stakes have gotten a lot higher because the
government has gotten more aggressive about enforcement actions,” David J.
Bloch, Washington-based principal legal counsel for Minneapolis-based Medtronic
Inc., said. Moreover, he said, in the last four or five years, the government
has started to hone in on the device industry.

Off-Label Promotion

One potential trouble spot concerns the promotion of devices for off-label
uses--uses for which the Food and Drug Administration has not specifically
cleared the device.

“We can only promote for on-label use, but there's often a disconnect,” Bloch
said.

“It's an ongoing challenge for industry to manage because there are a lot of
ways off-label can pop up, and some of them are subtle,” he said.

For example, he said, a device may be approved for certain age groups and not
for others, but doctors may use it for unapproved age groups.

“There's an ongoing difficulty to communicate with your customers,” he said.
“There are no clear guidelines.”

While decisions by the U.S. Supreme Court in 2011 and the U.S. Court of
Appeals for the Second Circuit in 2012 addressed some of the First Amendment
issues implicated in off-label cases, Bloch said FDA is not likely to shy away
from the off-label enforcement area.

In 2011, the high court in Sorrell v. IMS Health Inc., 131 S. Ct.
2653, 2672 (2011), declared unconstitutional a Vermont statute that prohibits
pharmacies from selling or disclosing prescriber-identifying information for
marketing purposes and that precludes pharmaceutical manufacturers from using
such information to market their products (5 MELR 628, 10/5/11). The high court
found the ban an impermissible restriction on free speech.

Later, in December 2012, the U.S. Court of Appeals for the Second Circuit
found that the criminalization of truthful, nonmisleading promotion of
FDA-approved pharmaceuticals violates the First Amendment. The case involved
Alfred Caronia, a former drug company sales representative (6 MELR 763,
12/12/12). The appeals court also reversed the conviction of Caronia for
promoting an unapproved use of a drug.

Bloch said that since the Sorrell and Caronia cases, FDA has
said it is not going to pull back from this enforcement area. “They'll look for
clear evidence of intent to misbrand and false statements and [a company] trying
to increase market share by promoting off-label use,” he said.

“The enforcement efforts [in the off-label area] continue and the large
settlements continue to come in,” he said.

Nonetheless, he predicted, in the wake of Sorrell and Caronia,
industry likely will begin asserting its First Amendment rights more
aggressively.

“The off-label field continues to be one of high interest to all of us who
practice,” he said. “There are some new issues coming up and it'll be
interesting to see how it all plays out.”

False Claims Act: Emerging Areas

In addition to off-label enforcement, Greg Levine of Ropes & Gray LLP in
Washington said another emerging area of potential liability is the use of the
False Claims Act in connection with federal food and drug law violations.

Liability under the FCA can be daunting because not only does the statute
impose treble damages, but it also it links up with exclusions provisions under
Medicare/Medicaid law under which a product could be excluded from
reimbursement, Levine said.

He also noted that several pending suits against device manufacturers seek to
expand the use of the FCA to more broadly enforce compliance with QSR (the
Quality System Regulation) and current Good Manufacturing Practices
(cGMPs)d.

For example, in a case pending in the U.S. District Court for the Central
District of California, United States ex rel. Ruhe v. Masimo Corp., the
court refused to dismiss an FCA case alleging that the labeling of certain
devices falsely claimed that the devices could measure hemoglobin to a certain
level of accuracy. The court construed the FCA broadly and found it applies to
all fraudulent undertakings that cause the government to pay money. In addition,
it found that requesting reimbursement for defective or lesser quality goods
also can constitute an FCA claim.

Other recent cases allege FCA liability based on companies' failure to
fulfill device reporting and notification requirements, including medical device
reporting and correction and removal reporting. Investigations in this area are
ongoing and some cases are being actively litigated, Levine said.

Another emerging area of potential liability is false or misleading claims
about approved product indications, he said. In these types of cases,
whistleblowers are alleging that a company's promotional messages about on-label
uses violate federal food and drug law. The theory is that misleading on-label
messages can lead to the government reimbursing products that are not medically
reasonable and necessary. Examples of such promotional statements include false
comparative claims, misrepresenting clinical trial data, or lack of fair
balance, he said.

While there are not yet any reported cases in the device arena regarding
on-label messaging, Levine said that “this is one [area] that companies should
have some concerns about.”

“The risks are increasing. I think these are real and new areas of risk and I
think companies need to keep their eyes on them,” he said.

FDA Warning Letters

On the FDA enforcement front, conference speakers said FDA is issuing an
increasing number of warning letters to device makers over violations of FDA's
Quality System Regulation and its cGMP requirements.

And while “FDA does not look at warning letters as punitive action ... if
you've received one, they feel punitive,” Sonali P. Gunawardhana of Wiley Rein
LLP in Washington said.

Moreover, warning letters put your company in a holding pattern pending
corrective action, she said. “You can't export product until you take corrective
action, and it can be tough for a device company, especially if they just have
one product,” she said.

FDA's main areas of concern with regard to cGMP violations are lack of
written Medical Device Reporting (MDR) procedures, problems with how companies
handle complaints, inadequate corrective action and preventive action
procedures, inadequate process and design changes, and failure to maintain
device history records (DHR), she said. Insufficient MDR procedures are a “huge”
area of concern, she said.

Most FDA inspections are for violations of good manufacturing practices, she
said. “It is an area of vulnerability if you're not following the
regulations.”

Because agency inspectors are going to look for documentation, Gunawardhana
advised companies to make copies of anything the field inspector copies. Doing
so, she said, will help a company respond to the agency later.

Also, she said, because FDA will hold manufacturers responsible for supplier
errors, companies must have agreements in place with suppliers and revisit those
agreements. Suppliers must have third party certification and companies must
understand the road map for the supply chain for each of their products, she
said.

“Revisiting often, training often, and understanding you're only as good as
your employees” is critical for device companies, Gunawardhana said.

“You have to make sure your quality procedures are in place and that you're
following them,” she said.

In addition to civil liability, cGMP violations can also lead down the
criminal road, she said. Corporate officers can be held strictly and criminally
liable for cGMP violations, she said.

“When FDA inspectors come out, they're looking for who the responsible person
is,” she said. Accordingly, Gunawardhana said, “you also have to be careful
about what statements you make to FDA inspectors.”

Consent decrees and criminal prosecutions generally name individuals as well
as the corporation itself. “If they can tie it back to you, you're going to be
individually named,” she said.

All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to books@bna.com.

Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)

Notify me when updates are available (No standing order will be created).

This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to research@bna.com.

Put me on standing order

Notify me when new releases are available (no standing order will be created)